where are they now: update #10 - the unreliable employee with a conflict of interest

Remember the manager who wasn't sure what to do about the low-performing employee who might have also been engaging in a conflict of interest on the side? Here's the update.

Well, we decided to reanalyze our development department as a whole, as the managers were lacking in management skills and we weren't making any money, so we did clear ship, and were able to dismiss her previous manager for a number of poor performance issues (including not generating revenue). We decided to eliminate an admin position too, and offered her a position that merged both some donor cultivation as well as database experience, which she considered a demotion, although it was the same duties with some admin involved, same pay. We stipulated that working from home would not be an option any longer, as she needed to be available 8-5 M-F. 

Of course, she could not accept a situation where she could not work from home (her reason being, her consultancy business would suffer and oh, how could we do that to her), and so she resigned, but not without trying to get me to empathise with her about the load of work her consultancy business, and that we should oblige her by allowing her 'some time away', and that we were making a big mistake by letting her go--yes, she was for real. And as far as I know, she's dwindled down to one client, as she reached out to us for some 'counsultancy work' to help with one of our events a few months ago. Needless to say, we instead hired someone else who is a stellar employee in every way.

Thanks for your advice and that of the posters - it helped me to remove the manager that allowed this to happen for so long, and put us in a much better position to take control of this employee.